The Evolution of Renovation Bonuses in Italy
Renovation bonuses, with a 50% tax deduction, are facing significant changes starting in 2025.
Another change is scheduled for 2028.
Let’s explore what these changes entail and why they are relevant for those undertaking building renovations.
It’s no secret that the current government aims to curb building bonuses, as openly announced.
The modifications to the superbonus between 2023 and 2024 clearly indicate the direction the government is taking to reduce expenses while incentivizing building works.
A Brief History of Renovation Bonuses
The renovation bonus was introduced by Law 449 in 1997, offering a 41% tax deduction for expenses incurred between January 1, 1998, and December 31, 1999, on property renovations.
From January 1, 2000, to December 31, 2001, the deduction was reduced to 36%.
In 2006, the deduction temporarily increased back to 41%.
In the following years, the measure underwent experimental changes, yearly extensions, until it became a permanent fixture with Dl 201 in 2011.
This decree introduced article 16 bis to Tuir, allowing a 36% deduction on a maximum expenditure of €48,000.
Subsequently, for expenses between June 26, 2012, and June 30, 2013, the deduction percentage was raised to 50%, with a maximum eligible expense of €96,000 (the current renovation bonus in effect).
In 2013, a new decree extended the 50% deduction until the end of 2013 and included a furniture and appliances bonus (also at 50% on a maximum expenditure of €10,000) for those benefiting from the renovation bonus.
The 50% deduction and furniture bonus, initially set to expire on December 31, 2013, were extended for another 4 years until the end of 2018.
The 2017 Budget Law further prolonged both measures until December 31, 2021, also introducing the deduction staggered over 5 equal annual installments.
Before the end of 2021, further extensions pushed the 50% deduction on a maximum expenditure of €96,000 until December 31, 2024.
The half-spending deduction (now amortized in 10 equal annual installments) remained in effect from June 26, 2012, to December 31, 2024.
What Will Happen on January 1st, 2025?
As of December 31, the last extension for renovation bonuses expires.
Without new legislative interventions (as another extension is unlikely), the renovation bonus will revert to the one outlined in article 16 bis of Tuir: a 36% deduction on a maximum expenditure of €48,000.
Another extension of the 50% deduction seems unlikely, as the Government has already announced a reduction to 30% from January 1, 2028, to December 31, 2033, aiming to counterbalance the cost of spreading the superbonus tax credits over 10 years.